Archive for ABI

UK Insurance Companies Pay Out Millions In Metal Theft Claims

The demand for raw materials, especially metals for industry in the emerging BRIC economies of Brazil, Russia, India and in particularly China, coupled with a recession in the UK has created a massive nationwide crime wave of metal theft that is costing UK insurance companies millions of pounds per week, according to a press release from the ABI (Association of British Insurers).
All types of metal are being stolen and each theft creates a series of public hazards and property damage.

Popular theft includes the lead from off of church roofs, cast iron drain and manhole covers from the streets, railway track and copper cabling from permanent way and sidings, all types of electrical cabling from business premises or unoccupied buildings. Nowhere is immune to the theft and reports have been made of damage from all corners of the country.

A spokesman for the ABI said that metal theft had doubled in the UK in the past five years with now around 1,000 reported police and insurance claim incidents each week.

The disruption the crime causes is estimated to cost the UK economy about £770m each year. Much of this is paid out in claims for business interruption.

The ABI report said metal theft was an “ever-present threat” and it will meet the UK Government and British Transport Police to debate the issue.

Nick Starling, the ABI’s director of general insurance, said: “Metal thieves are putting lives at risk, causing expensive damage and massive disruption. “This is why we are working with the Government to crack down on metal thefts”.

The ABI states that each week:
1,000 metal thefts occur – double the number of five years ago
300 tonnes of metal was stolen per week, which is the equivalent of 300 cars
The UK economy loses £15m in replacing stolen metal, compensating victims and disruption
Train services are delayed by 117 hours after cable thefts
23 churches are attacked

Example of recent thefts include a range of attacks from the small to the large-scale organised crime gangs.

A £500,000 sculpture was stolen  from a park in London by a few individuals while a large gang stole a train with two trucks of scrap metal, driving it down the line and emptying the metal into lorries at the track-side before making off.

The ABI support legal action which will make it harder to resell stolen metal and much tougher penalties for offenders and are calling for scrap dealers and metal recycling industry, which is  is worth an estimated £5.6bn per annum and employs 8,000 people in the UK, to be registered and cash payments to be banned.

Chris Coates of UK Commercial Ltd insurance brokers warns businesses, especially those at risk to take extra precautions to prevent theft and to minimize any disruption caused which often amounts to the biggest loss.

“All businesses large and small should carry out their own internal risk assessment as to the likelihood of suffering from a metal theft crime.”

“The theft of  a roll of lead cladding from the roof of building housing a computer repair business, could be devastating if it occurred on a wet stormy night. Often extra preventative security measures such as denying access to the roof through for example the application of anti-climb paint, is a simple, effective and cheap method of deterring metal theft.”

ABI Plea For Longer Riot Claims Period Approved By UK Government

The Association of British Insurance companies, the ABI, has issued a statement clarifying the position of Insurance and Claims for Riot Damage.

The ABI warn…..

On current estimates insured losses and damage suffered by individuals and UK businesses are likely to be well over £100 million.

The ABI has reassured customers that they are covered for riot damage under their home and business insurance and claims will be paid by their insurer as quickly as possible. People with insurance should claim directly from their insurer as soon as they can.

Riot Damages Act 1886

When a riot happens a statutory police compensation scheme is activated to provide compensation to organisations and individuals for losses that they could not possibly have predicted. This compensation scheme has existed on the statute books since 1886 with its operation having stood the test of time for the last 125 years.
The scheme means that people who are under insured or do not have insurance have somewhere to go for compensation and redress.

Other organisations, including insurers, can claim under the scheme for money they have paid out to their customers for loss and damage they have suffered as a result of the rioting, although insurers will themselves be liable to pay for business interruption losses, which are not covered by the scheme.
The scheme means that people do not have to pay higher premiums every year to insure their home or business because of a riot which may only happen once every thirty years.

For example, shopkeepers in Tottenham have still been able to get insurance, despite events in 1985, and have not had to pay extra because the police compensation scheme gives individuals and organisations, and their insurers, certainty that costs of the unexpected will be covered.
Contrary to some reports, neither the Home Secretary nor the police need to designate the events as a “riot” in order for the police compensation scheme to be activated. The law sets out a range of criteria for this, for example the number of people causing a disturbance.

Extension of Claims Period

The ABI met with the Home Secretary on Tuesday and have written to ask her to extend the claims period to the police compensation schemes from the usual 14 days to the maximum 42 days to give people the time they need to fully assess the loss and damage they have suffered and properly submit their claim.
Insurers’ priority is to support people affected by the riots in London and other major cities, and people are urged to contact their insurer as quickly as possible to start discussing their claim. Many firms have 24 hour helplines and are on hand with support and advice.

David Cameron has just finished speaking for 165 minutes on the riots in the House of Commons, and has confirmed that the ABI’s request will be met and the period extended to 42 days.

Mr Cameron also stated that the Riot Damages Act provided ‘unlimited’ funds for those affected by riots and both the Treasury and the Home Office would provide the financial support for claims against local police authorities.

UK Insurance Fraud On The Rise Despite More Detection!

We’ve predicting it here at Insurance Blog for quite some time and now its official..

Insurance Fraud is on the rise again!

A symptom of every recession, the difference this time is that detection rates of Insurance Fraud are also on the increase, but that doesn’t seem to be bothering those intent on criminal deceit, according to the latest figures released today by the ABI (Association of British Insurers).

They Never Learn!

You could not make it up but some false claimants did.

Insurers are detecting more fraudulent claims than ever: over 2,500 worth £18 million every week

A gymnast with back trouble, a flying toilet roll holder, an invented wedding engagement, a fake photograph and an invisible wall were among the record number of fraudulent insurance claims detected by insurers in 2010, state the ABI.

The figures highlight that in 2010:

• Insurers uncovered 133,000 fraudulent insurance claims – 2,500 every week – up 9% on 2009. The value of these claims was £919 million, also up 9% on the previous year. Over the last five years both the number and overall value of insurance frauds detected have risen by over 100%.
• The most common frauds involved home insurance with 66,000 bogus or exaggerated claims detected, followed by dishonest motor insurance frauds with 40,000 frauds uncovered.

Car Insurance frauds were the most costly, costing the industry £466 million.

• The value of savings from detected frauds represented 5% of all claims, compared to 4% on 2009

Cheats uncovered by insurers include:

• A claim for back injuries apparently sustained from a fall while working in a nightclub was rejected when Facebook images showed the claimant performing gymnastics, and training for a charity run.
• A woman’s claim for facial injuries she said resulted from a falling toilet roll holder in a fast food outlet was rejected when it was shown that the holder would have had to have fallen upwards to cause the injury claimed.
• A man claimed for a ‘lost’ engagement ring. His ex partner said that she was never given a ring as they had never been engaged. On the same day the man said he had suddenly found the ring.
• A claim by a woman for the loss of a £2,000 watch after a night out was rejected when the photograph she provided of her allegedly wearing the watch turned out to be that of a friend.
• A claim for injury said to be caused by falling over a wall was rejected when it was proved that there was no wall at the scene of the alleged incident.

It is estimated that insurance fraud costs £2billion a year, adding, on average, an extra £44 a year to the insurance bill for every UK policyholder.

New National Insurance Fraud Register
Nick Starling, the ABI’s Director of General Insurance and Health, said:

“Insurers are working harder than ever to protect honest customers against fraud. The savings made by weeding out fraudulent claims would otherwise end up being paid for by honest policyholders through higher premiums.

“Fraudsters continually look for new ways to con insurers, so we are upping our game. Early next year we will be setting up a national Insurance Fraud Register, which will contain details of all known insurance cheats. And at the same time the first ever national police insurance fraud investigation unit will begin its operations, making it harder than ever to commit insurance fraud.”

Glen Marr, Director, Insurance Fraud Bureau comments:

“Fraudsters will increasingly find the insurance industry a hostile environment. The IFB is committed to supporting insurer efforts to systematically root out and tackle fraudsters. At the IFB we have access to a significant volume of industry data, use sophisticated and powerful analytical software, work in partnership with insurers, law enforcement and regulators, and have no shortage of reports being received from consumers of their knowledge or suspicions of those concerned with defrauding the industry, through our Cheatline facility.

“We would urge anyone with information on any type of insurance fraud to support industry efforts to root out the fraudsters, by calling the IFB free and confidential Cheatline on 0800 3282550 or by using our online reporting facility at www.insurancefraudbureau.org/report.

Reports to Cheatline can be completely anonymous if necessary. It’s important to underline that some of those concerned with insurance fraud, are also involved in criminal activities where there is harm to local communities”.

Insurance Blog is pleased that when these criminal gangs are caught, their assets will be seized as part of the new Proceeds of Crime Act. Fraud is not a victimless crime and we all pay higher premiums because of it!

A Quarter of Home Insurance Policies Cancelled As Recession Grips

One in four people have cancelled or not renewed their annual home insurance in order to save money during the recession, according to a recent survey carried out for the association of British insuraers (ABI)

The research carried out by a national survey of over 2,000 adults conducted by YouGov, on behalf of the ABI, also shows that other insurances that are seen as ‘luxuries’ such as life insurance are also being ditched, as families try to balance outgoings with income, in what is already in most homes a seemingly impossible task.

The survey found the following worrying trends for the UK Insurance market:

Nearly a quarter of people 22% say that to save money in the last year they have cancelled or not renewed their home contents insurance.

More worryingly, 17% say that they have cancelled or not renewed their buildings cover, some probably against the terms of the mortgage that usually insists that buildings cover is in place to protect value of the charge on the property.

In Scotland, the figures rise to 28% for contents and 21% for buildings.

13% have cancelled their life insurance.

One in five (21%) say that they are seriously considering reducing or stopping saving. (Well with Interest rates so low – who can blame them!)

This lack of cover is leaving many families even more exposed to their biggest fear in the recession: nearly half (49%) of those surveyed said that they currently worry about their in ability to cope with a sudden event, such as a burglary, accident or loss of employment.

Interestingly, other research found that :

Over half (53%) of women worry about how they would cope with an unexpected event (compared to 43% of men).

And 44% of women are worried about the adequacy of their pension (38% men), reflecting lower pensions among women.

Asked what cutbacks people have or would be making: over two thirds (68%) said that family treats, such as eating out, were top of their list, followed by holidays (56%). Six out of ten women are prepared to reduce spending on clothes and shoes.

Insurance Blogger urges those thinking about cutting back on home insurance cover to consider what would happen if their house was burgled or flooded?
With rising crime and rising floods a couple of hundred pounds on a home insurance policy might seem small beer if the worst occurs.
Shop around for home insurance on the Internet or visit a specialist home insurance provider for an array of good deals at the current time.